Monthly Archives: July 2014

July 31, 2014

OSHA Rising – Forecasting the Impact of Chemical Facility Safety Executive Order On OSHA Enforcement

Overdyke_TBy Trey Overdyke

The Occupational Safety and Health Administration (OSHA) regulates highly hazardous chemicals, in part, through the Process Safety Management (PSM) standard, which states “This section contains requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals.  These releases may result in toxic, fire or explosion hazards.”  29 C.F.R. § 1910.119.  Recent discussions by a federal working group may result in expansion of the PSM standard to include additional industries and could lead to increased OSHA enforcement activities.  In addition, suggestions for strengthening the civil and criminal penalties for safety violations could affect all employers subject to the OSH Act, not just those covered by the PSM standard.

OSHA’s Efforts to Implement Executive Order

In an effort to improve the safety and security of chemical facilities and to reduce the risks associated with hazardous chemicals, President Obama issued Executive Order (EO) 13650—Improving Chemical Facility Safety and Security (EO 13650) last year. The EO 13650 established a working group co-chaired by the Secretary of Homeland Security, the Administrator of the Environmental Protection Agency, and the Secretary of Labor (the Working Group) to address and reduce hazards associated with the hazardous chemicals in the United States. 

Following the issuance of EO 13650, the Working Group published the “Solicitation of Public Input on Options for Policy, Regulation, and Standards Modernization.” That document served as a starting point to identify the preliminary options for stakeholder discussion regarding increased safety and security for hazardous chemicals.  In May 2014, the Working Group published a status report on their efforts to comply with the directives set forth in EO 13650 — Actions to Improve Chemical Facility Safety and Security – A shared Commitment (Status Report

OSHA’s Federal Plan of Action

Although it remains unclear what impact, if any, EO 13650 will have on OSHA’s enforcement regime, the Federal Action Plan’s section entitled “Modernizing Policies and Regulations,” strongly suggests that OSHA intends to expand the scope of the PSM standard as well as increase civil and criminal penalties. 

The Status Report states the following: “Using lessons learned from incident investigations, enforcement experience, and comparison with industry practices and regulatory requirements of other States, counties, and countries, OSHA determined that a stronger PSM standard can more effectively prevent incidents and protect workers.”  (Emphasis added).  Many of OSHA’s immediate provisions address ways to clarify the PSM standard.  Specifically, the Status Report states that in the year following the publication of this report, OSHA will clarify a number of elements of the PSM standard, including

  1.  interpretations of various definitional terms such as “retail facilities”;

  2.  revising jurisdictional concentration levels of chemicals covered by the PSM standard;

  3. whether Ammonium Nitrate as a covered chemical under PSM standard; and

  4. determining whether to include oil and gas drilling and servicing operations under PSM standard, which are currently exempt;

More Industries May Be Subject to PSM Standard

Though styled as a means to “modernize” OSHA’s PSM standard to improve safety, the Federal Action plan suggests a much broader OSHA enforcement regime.  Indeed, the Federal Action Plan does contain action items that suggest a concerted effort to clarify various ambiguities in the PSM standard, but the overall thrust of the plan appears to focus heavily on including more industries under the jurisdiction of the standard. 

Increased Penalties Sought for All OSHA Violations

The Status Report also provides a clear indication that OSHA will attempt to increase the civil and criminal penalties through legislation.  Currently, violations of the OSH Act can lead to civil penalties of up to $70,000 per violation.  Criminal penalties, however, are only imposed for willful violations that cause an employee death.  Criminal penalties can total up to $10,000 and not more than six months in jail for a first conviction, and up to $20,000 and not more than twelve months in jail for a second conviction.  The Working Group compared the OSHA civil and criminal penalty provisions to the same provisions under EPA and stated “OSHA’s PSM standard and EPA’s RMP regulation were created at about the same time pursuant to the Clean Air Act Amendments to address the same underlying general hazards.  Yet the OSH Act’s penalty provisions are much weaker than those under the CAA’s RMP program.  This imbalance in penalties should be corrected by strengthening the OSH Act’s civil monetary penalties and indexing them for inflation.”   

Regardless of whether employers are or will be covered by the PSM standard, it appears that OSHA’s stated intent to increase civil and criminal enforcement penalties could impact all employers. 

Stay Tuned and Stay Informed

Employers should continue to monitor the Working Group’s activities in order to stay involved and have a voice in any future rule making or policy changes.

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July 29, 2014

Options for Hiring Foreign Workers After H-1B Visa Rejection

Tsai_RBy Roger Tsai 

The U.S. Citizenship and Immigration Services (USCIS) received about 172,500 H-1B petitions this April for the annual allotment of 85,000 H-1B visas (65,000 in the general H-1B category and 20,000 for those with advanced degrees) to be issued this fiscal year.  Businesses use the H-1B Visa program to employ foreign citizens to work in the U.S. in highly specialized fields, such as engineering, science and computer programming.  When the number of petitions exceed the cap, as they do many years including this year, USCIS uses a random, computer-generated lottery to select the petitions that will be processed.  Those petitions not randomly chosen are  returned to the submitting employer along with the filing fees. 

If you need to hire foreign professionals but your H-1B visa petition was not selected, all is not lost.  Numerous alternatives exist that may provide you with the means to hire the specialized foreign workers you need. Consider the following alternative employment visas: 

  1. F-1 OPT STEM Extensions. Science, tech, engineering, and math (STEM) graduates may apply for a 17 month work permit to extend their one year Optional Practical Training (OPT).  The graduate must have applied for the 17 month OPT by filing an I-765 Application for Employment Authorization, which typically takes three months to process.  You, as the employer, must participate in E-Verify in order for the STEM graduate to be eligible for this extension. 
  2. TN Visa.  The TN visa is a three year nonimmigrant visa for Canadian and Mexican citizens and authorizes the individual to work and live temporarily in the U.S. Each TN nonimmigrant worker must demonstrate that he or she will be working in one of sixty TN approved occupations. Occupations include but are not limited to nurses, attorneys, engineers, management consultants, and scientific technicians.  Almost all TN positions require a Bachelor’s degree except for a Scientific Technician or Management Consultant position. Unlike the H-1B, there is no numerical limitation to the number of TN visas issued.  
  3. E-3 Australian Specialty Occupation Visa.  This visa allows Australian citizens to enter the U.S. for a two year period to work in a position that qualifies as a specialty occupation. Specialty occupations are defined as any position which normally requires a Bachelor’s degree in a specific major or concentration (i.e. engineer, nurse, scientist, software developers, and accountants).  Roles which are solely managerial or sales do not qualify as specialty occupations.  E-3 visas are limited to 10,000 per year. 
  4. L-1B Specialized Knowledge Worker Visa.  If the worker is currently outside the U.S. working for a foreign parent or subsidiary company related to a U.S. company and has worked for the foreign company for at least one out of the last three years, he or she may qualify for the L-1B intercompany transfer for specialized knowledge workers. The individual must hold specialized knowledge which is distinguished from knowledge held by others in the company and industry. 
  5. Lateral Hire of H-1B Workers. The H-1B visa cap applies only to new H-1B petitions.  Consequently, employers may be able to hire foreign workers who currently hold H-1B visas through other employers.  Current H-1B employees typically can extend their visa status for up to six years and in some cases, even longer.  In addition, foreign nationals who previously held H-1B status but are not currently employed in the U.S. are exempt from the annual H-1B cap and may be returned to that status for the rest of their six-year H-1B visa period. 
  6. Dependent status. Individuals whose spouse is in the U.S. under F-1, TN, L-1, H-1B or another nonimmigrant status may choose to change to the correlating dependent status (F-2, TD, L-2, H-4) which will allow them to remain in the U.S. but not to work.  To apply for this change of immigration status, the individual must submit an I-539 Application to Change or Extend Status to USCIS.  This typically requires a three month processing time. 
  7. F-1 Student status.  Non-U.S. citizens may choose to return to school and change their status to F-1. Depending on his or her degree program, the international student’s office may allow the individual to work off-campus part time under Curricular Practical Training. Students should contact their university’s international student’s office for additional information. 

Explore Visa Alternatives To Meet Your Employment Needs 

While not an exhaustive list, these are some of the available options that may help you employ the degreed, specialized workers your business needs.  If your H-1B petition wasn’t selected under the cap, consider whether one or more of these alternatives applies.  As always, please feel free to consult us with your immigration and visa questions.

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July 22, 2014

Tips For Curbing Sick Leave Abuse

Vilos_JBy Joanna Vilos 

Your receptionist calls in sick only on Fridays, never other days of the week.  Your maintenance man always seems to need to go home early with a sore back on days with home Major League Baseball games.  You hear reports that your computer technician was seen on the golf course on a sick day.  Your gut tells you that these employees are abusing your sick leave policy.  What should you do?  Here are some tips for addressing suspected sick leave abuse and proactive measures to help curb future abuse. 

Tip #1: Review Attendance Records 

Take a careful look at the employee’s attendance record and make sure your documentation supports your suspicions.  Is there really a pattern of days off right before or after weekends, holidays or vacations?  Did the employee provide a specific reason for his or her absences supported by medical documentation?  Is the employee authorized to take intermittent FMLA leave?  You need to verify the facts before you take any action.  You do not want to act on impulse and risk retaliating against a worker who is authorized to be absent under a designated FMLA leave, ADA reasonable accommodation or other protected reason. 

Tip #2: Discuss With The Employee 

If, after verifying the facts surrounding the employee’s sick days, you have reason to suspect abuse of sick time, schedule a meeting with the employee to discuss attendance issues.  Do not immediately accuse the employee of faking an illness on sick days but calmly explain what your records show.  Express your concerns in a non-confrontational manner (e.g., “It appears that you’ve taken a sick day every other Friday for the past 3 months” or “We are concerned that you might be using sick days when you are actually able to come into work”) and allow the employee to respond.  Often, what the employee tells you will guide your next steps.  In any case, the employee is now on notice that you’re aware of his or her sick time use and will be watching it in the future. 

Tip #3:  Require a Doctor’s Note 

After discussing your concerns with the employee, an effective option for curbing future abuse is requiring the employee to provide a doctor’s note for all future sick days, consistent with your sick leave policy.  If your sick leave policy provides that you may request medical documentation for sick days, or your policy is silent on this issue, inform your suspected abuser that he or she will need to submit a doctor’s note for any future instances of sick leave.  This added requirement typically limits abuse.  But just remember to keep medical information separate from other personnel records. 

Tip #4: Notify Employees that Sick Leave Abuse Will Not Be Tolerated 

Generally, you want to address the one or two problem employees directly rather than admonishing your entire workforce.  However, if sick leave abuse is widespread, consider sending out a company-wide e-mail reminding employees of the acceptable reasons for using sick leave and emphasizing that any abuse of sick leave will not be tolerated.  Keep the notice professional and non-accusatory.  Often, this type of timely reminder causes potential abusers to think twice the next time they consider using a sick day when they aren’t sick. 

Tip #5: Adopt Sick Leave Incentive or Attendance Awards 

If you give employees an incentive not to use sick leave, you’ll likely find that sick leave usage drops.  Critics may say that you shouldn’t have to give people an additional incentive to come to work or that incentive programs encourage employees to show up when they’re sick and contagious.  However, some workers respond well when given the chance to achieve recognition or other benefits for good attendance.  Options to consider include: 

  • Free lunch or a gift card for each quarter that an employee has perfect attendance;
  • A floating personal day off with pay for every six months without calling in sick;
  • An incentive bonus (e.g., eight hours of pay) for employees who use two sick days or less during the previous year;
  • Converting unused sick time (or a portion thereof) into additional vacation time next year;
  • Paying a portion of employees’ gym memberships for each month they do not use any sick time; or
  • Allowing employees to cash out their sick leave balance upon retirement. 

Another less direct incentive is to do away with a “use-it-or-lose-it” sick leave policy and allow employees to carry forward  a portion of unused sick time from year to year.  Yes, a higher sick leave balance is a liability for employers, but many employees want to save their sick time in case they incur a long-term illness or injury in the future.  Allowing them to bank sick time helps eliminate the urge for employees to use their sick time for non-sick reasons because they are about to lose it. 

Tip #6: Consider Whether a PTO System Is Appropriate for Your Business 

Instead of offering separate benefit programs for vacation, sick, and/or personal days, consider whether a paid time off (PTO) program would work for your company.  By allotting a certain number of days off to be used at the employee’s discretion, you eliminate having to administer multiple leave programs and you leave it up to the employee to decide the reason for taking time off.  You no longer care whether the employee is sick or taking a vacation day – it’s all the same to you.  

You can still put procedures in place to require advance notice of planned days off and a call-in process for unplanned absences.  But because either type of absence counts against the employee’s PTO bank, they are less likely to abuse the system.  Most employees want to preserve sufficient time for a vacation, lessening the urge to use all their time for unplanned absences.  

Final Thoughts

The old phrase is “one bad apple can spoil the whole bunch.”  Don’t let a few scheming employees taint your approach to offering sick leave and other benefits that the majority of employees value and use appropriately.  Review your sick leave policy, revise it to allow for additional processes, as needed, and enforce it consistently and uniformly.  If you suspect abuse, follow the tips above to put a stop to it. 

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July 17, 2014

New Pregnancy Discrimination Guidance Issued By The EEOC

Howland_PBy Pamela Howland 

On July 14, 2014, the Equal Employment Opportunity Commission (EEOC) published  a new Enforcement Guidance on Pregnancy Discrimination and its relation to the Americans with Disabilities Act (ADA).  In the Guidance, the EEOC not only extends pregnancy discrimination protections to past and intended pregnancies but it also provides that pregnancy-related impairments may qualify as a disability under the ADA Amendments Act of 2008 (ADAAA), even though they are only temporary.  Here are the highlights of the EEOC’s Pregnancy Discrimination Guidance. 

Pregnancy Discrimination Not Limited to Current Pregnancies 

The EEOC states that the fundamental principles behind the Pregnancy Discrimination Act (PDA), enacted in 1978, are to prohibit employers from discriminating against an employee on the basis of pregnancy, childbirth or related medical conditions and to ensure that women affected by pregnancy, childbirth or related medical conditions are treated the same as similarly situated persons not so affected.  The EEOC goes on to state that the PDA does not restrict these protections to current pregnancies alone.  Accordingly, the EEOC provides examples of how a past pregnancy or a future pregnancy may form the basis of a discrimination claim where an employer takes adverse employment action against a women on such grounds.  The Guidance also includes examples related to unlawful discrimination based on: 

  • Reproductive risk;
  • Intention to become pregnant;
  • Infertility treatments; and
  • Use of contraception. 

Notably, in its Guidance, the EEOC states “[e]mployers can violate Title VII by providing health insurance that excludes coverage of prescription contraceptives . . .” – a position seemingly at odds with the U.S. Supreme Court’s recent decision in the Hobby Lobby case which held that closely held for-profit companies are not required to provide contraceptive methods that violate the company-owners’ sincerely held religious beliefs.  Hobby Lobby did not, however, allege a violation of Title VII so the EEOC’s position may be challenged in future cases. 

Medical Conditions Related to Pregnancy or Childbirth 

The EEOC clarifies that a woman with a medical condition related to her pregnancy or giving birth must be treated the same as other employees who are similar in their ability or inability to work but are not affected by pregnancy or childbirth-related medical conditions.  The agency points to circumstances in which discriminating against a female employee who is lactating or breastfeeding could violate Title VII.  It also addresses abortions, stating that Title VII protects women against discrimination for having or contemplating an abortion but that employer-provided health insurance need not pay for coverage of an abortion except where the life of the mother would be endangered or medical complications arose due to the abortion. 

Light Duty for Pregnancy-Related Conditions 

According to the EEOC’s Guidance, an employer is required to treat an employee temporarily unable to perform the functions of her job because of pregnancy-related conditions the same as it treats other non-pregnant employees who are similarly able or unable to work.  This includes providing a light duty position to a pregnant worker on the same terms that light duty is offered to other employees with similar work restrictions or inability to perform certain tasks. 

Pregnancy-Related Impairments May Be A Disability 

The EEOC states that although pregnancy itself is not an impairment under the ADA and therefore, is not its own disability, some pregnant workers may have pregnancy-related impairments that fall within the eased disability definition under the ADAAA.  For example, some pregnancy-related conditions involve major bodily functions, such as anemia, gestational diabetes or nausea that causes severe dehydration.  To the extent that such impairments substantially limit a major life activity, they may qualify as a disability under the ADA, even though they may be temporary. 

Because pregnancy-related impairments may be ADA disabilities, employers have an obligation to provide a reasonable accommodation as long as it does not impose an undue hardship on the business.  Examples of reasonable accommodations for pregnancy-related impairments include: 

  • Redistributing marginal functions, such as the occasional lifting of heavy objects;
  • Modifying how a job function is performed, such as allowing the pregnant employee to sit on a chair rather than standing;
  • Modifying workplace policies, such as allowing food at the employee’s work station or allowing more frequent breaks;
  • Allowing telecommuting for a pregnant employee on bed rest, if feasible;
  • Purchasing or modifying equipment or devices;
  • Changing work schedules, such as starting later to accommodate morning doctor appointments;
  • Granting leave, in addition to any time off that the employer would normally provide under a sick leave policy; and
  • Light duty, such as moving a retail stocker to a cashier position temporarily. 

Best Practices 

The EEOC offers best practice suggestions to help employers comply with the requirements of the PDA and the ADA.  Some, the EEOC admits, go beyond what is federally mandated but the EEOC contends that such proactive measures decrease complaints of pregnancy-related discrimination and enhance employee productivity.   Many of its best practices are those that all employers should adopt to limit discrimination on any basis, such as developing and enforcing strong anti-discrimination policies, training managers on the law and how to handle complaints, responding to complaints of pregnancy discrimination promptly and thoroughly and avoiding retaliation against employees who assert their rights under the PDA and ADA. 

In conjunction with its Enforcement Guidance on Pregnancy Discrimination and Related Issues, the EEOC also published a Questions and Answers document as well as a Fact Sheet for Small Businesses related to pregnancy discrimination. 

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July 15, 2014

Holland & Hart Launches Cutting-Edge Workplace Safety Report

Wist_CHolland & Hart announces a new tool for staying up to date on workplace safety and health law – Workplace Safety Report, a cutting-edge, online resource with attorney-curated links and insight.  The Report makes it easy for employers to stay up to date on these important issues,  automatically pushing updates to anyone who follows via Twitter (@worksafereport), RSS, or workplacesafetyreport.com.

The Report is the only resource of its kind, according to Matt Linton, who, along with Cole Wist and Trey Overdyke, developed and contribute to the website.  “This is not your typical, sleepy law firm blog,” said Linton.  “Our goal is to provide key information in 30 seconds or less enabling our readers to flag topics for further research later.”

Linton_MThe Report includes information specifically related to industries at high-risk for work-related injuries such as construction, mining, oil & gas, refineries, manufacturing, health care, and more.  In addition, the Report provides intelligence related to the various federal and state organizations and agencies that regulate safety and health in the workplace.  These include the Occupational Safety and Health Administration (OSHA), the Chemical Safety Board, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), and the Mine Safety and Health Administration (MSHA). 

Overdyke_TLinton, Wist, and Overdyke are attorneys in Holland & Hart’s Workplace Safety/Emergency Response practice. With roots in its internationally recognized mining practice and market-leading litigation and labor and employment practices, Holland & Hart represents employers on a wide range of regulatory enforcement and litigation matters related to workplace safety and health.  Visit hollandhart.com for more information.

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July 10, 2014

FMLA Regulations To Be Revised to Include Same-Sex Spouses Based on Place of Celebration

BRitchie_Jy Jason Ritchie 

When the U.S. Supreme Court struck down a portion of the Defense of Marriage Act last year in United States v. Windsor, federal agencies scrambled to revise regulations and guidelines so that “marriage” and “spouse” were no longer defined to exclude same-sex marriages.  Initially, the Department of Labor (DOL) issued a public guidance document to clarify that the definition of spouse under the Family and Medical Leave Act (FMLA) covers same-sex spouses residing in states that recognize same-sex marriages.  Now, almost a year later, the DOL is updating its regulations to change the definition of spouse so that it applies to any legal same-sex marriage, regardless of whether the employee resides in a state that recognizes such marriages. 

Place of Celebration to Govern 

Under the current FMLA regulations, the definition of spouse is based on the state where the employee resides, not on the state where the employee was married.  Under this so-called “state of residence” rule, an employee who was legally married in a state that recognizes same-sex marriages but who lives in a state that does not recognize such marriages is unable to use FMLA leave to care for his or her same-sex spouse.  Under this notice of proposed rulemaking, the DOL changes the FMLA definition of spouse from a “state of residence” rule to a “place of celebration” rule based on where the marriage was entered into.  By utilizing the “place of celebration” rule, all legally married couples, whether opposite or same-sex, or whether married in a ceremony or by virtue of common law, will be entitled to FMLA rights regardless of where they live. 

FMLA To Apply in Additional Circumstances 

The proposed change in the FMLA regulations defining a spouse expands the circumstances under which eligible employees will be entitled to FMLA leave, including: 

  • FMLA leave to care for a same-sex spouse with a serious health condition;
  • Qualifying exigency leave related to a same-sex spouse’s covered military service;
  • Military caregiver leave related to a same-sex spouse’s military injury or illness;
  • FMLA leave to care for a stepchild who is the child of the same-sex spouse, even when the employee does not stand in loco parentis; and
  • FMLA leave to care for a stepparent who is the parent of the same-sex spouse, even when the stepparent never stood in loco parentis to the employee. 

Despite this expansion in coverage, the practical effect of this change will likely be minimal for most employers.  Employers in states that recognize same-sex marriages are already obligated to provide FMLA leave in the above-mentioned situations.  Therefore, the only expansion of FMLA coverage is for those employers with employees who reside in states that do not recognize same-sex or common law marriages who soon will be entitled to use FMLA in these circumstances under the amended definition.  The proposed amendment would not extend FMLA rights to an employee’s partner in a civil union as civil unions for both opposite-sex and same-sex couples are not considered marriages under the FMLA. 

Employers May Request Documentation 

Employers may continue to request a marriage license or other reasonable documentation or statement of a family relationship as long as that requirement is applied in a non-discriminatory manner.  In other words, employers may ask for supporting marriage or familial documentation from employees in same-sex relationships if they also ask for such documentation from employees in opposite-sex relationships. 

Comment Period Closes August 11, 2014 

Interested parties may submit comments regarding the proposed changes to the DOL no later than August 11, 2014.  Additional information may be found on the DOL’s website.

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July 8, 2014

Idaho Employers Should Proactively Determine Same-Sex Spouse Benefits

Clark_BBy Bret Clark 

Both supporters and opponents of same-sex marriage in Idaho are on hold after the United States District Court for the District of Idaho’s decision invalidating Idaho’s same-sex marriage ban was delayed pending appeal to the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit has fast tracked the appeal, but it will not hear oral argument until September and a decision will not likely be issued for several months after that. 

Similar decisions have been made in United States District Courts across the country. The United States Court of Appeals for the Tenth Circuit, the first Circuit to decide the issue, ruled in late June that state bans on same-sex marriage are unconstitutional. 

While the Ninth Circuit determines the issue, Idaho employers should prepare for the real possibility that same-sex marriages will be recognized by Idaho in the near future and take steps to comply with new federal rules on same-sex marriage by determining whether to extend employee benefits to same-sex spouses and ensuring that decision is properly documented. 

Same-sex spouse coverage not required for most employee benefits 

Even if same-sex marriages are recognized in Idaho, state and federal laws generally do not require employers to extend employee benefits to same-sex spouses. For example, if an Idaho employer allows employees to elect health coverage for opposite-sex spouses, the employer will not be required under federal or Idaho law to also offer coverage to same-sex spouses (even if the Idaho ban is invalidated). (One caveat is the potential for discrimination issues, as described below). 

Accordingly, it is important for employers to determine whether they will offer medical coverage and other employee benefits to same-sex spouses. Many employers are waiting to make a decision regarding same-sex spouse coverage until an employee requests coverage for his or her same-sex spouse. However, an after-the-fact decision can be problematic for several reasons and invites litigation. Employers that decide to limit coverage to opposite-sex spouses will be in a much better position if they document that decision before same-sex spouse coverage is requested. 

IRS and DOL recognition of same-sex marriage 

For most purposes, the Department of Labor (DOL) and Internal Revenue Service (IRS) have both adopted a rule that they will recognize all same-sex marriages entered into in states that allow same-sex marriage, regardless of the couple’s state of residence (the state of ceremony rule). 

The main exception to this generally applicable rule, however, was that the DOL had issued guidance recognizing same-sex spouses for Family and Medical Leave Act purposes only if the couple resides in a state that recognizes same-sex marriage (the state of residence rule). The result was that an employee who was legally married to a same-sex spouse could be denied FMLA leave related to his or her same-sex spouse if residing in a state that did not recognize same-sex marriage. 

On June 20, 2014, however, the DOL announced a proposed rule extending the state of ceremony rule to FMLA leave. Once adopted, the revised regulation will permit eligible employees to take FMLA leave to care for their same-sex spouse with a serious health condition, take qualifying exigency leave due to their same-sex spouse’s covered military service and take military caregiver leave for care for their seriously ill or injured same-sex spouse who is a covered service member. As a result, the state of ceremony rule will apply for virtually all IRS and DOL purposes. 

Potential discrimination issues 

As employers determine whether to offer employee benefit coverage to same-sex spouses, they should keep in mind that although federal and Idaho law do not necessarily require employers to offer same-sex spouse coverage, other applicable laws may require such coverage. 

Several Idaho cities (including Boise, Coeur d’Alene, Ketchum, Moscow, Sandpoint, Idaho Falls, Pocatello and, most recently, Victor) have adopted ordinances prohibiting discrimination on the basis of sexual orientation. If Idaho begins to recognize same-sex marriage, employers that offer medical coverage and other employee benefits to opposite-sex spouses of employees in these cities could violate these non-discrimination ordinances if they do not also offer benefits to same-sex spouses. 

In addition, the law of other states may require Idaho employers offering opposite-sex spouse benefits to employees in other states to also offer same-sex spouse benefits. For example, if an Idaho employer has California employees, any spousal coverage should be offered to both opposite-sex and same-sex spouses of California employees. 

Potential employment tax issues 

Finally, as employers determine whether or not to offer same-sex spouse benefit coverage, they should also examine the employment tax consequences of that decision. 

For federal employment tax purposes, same-sex spouse coverage is generally tax-free. However, the value of benefits provided to same-sex spouses is taxable for Idaho income tax purposes. This may change depending on the Ninth Circuit’s decision on Idaho’s same-sex marriage ban. The taxation of benefits provided to same-sex couples varies from state to state. 

Ensure plan documentation reflects decision 

Once an employer decides whether or not to offer coverage to same-sex spouses, it should carefully review plan documentation to confirm it is consistent with that decision. 

Plan documentation for medical and other employee benefits is often ambiguous. For example, many medical plans define spouse as any “legal spouse.” This definition is ambiguous in light of the many recent changes to the law regarding same-sex spouses and should be clarified. An ambiguous definition of spouse can cause a significant litigation risk if a same-sex spouse is denied coverage and is inclined to test his or her rights in court. 

Conclusion 

Even though many questions remain regarding an employer’s obligation to recognize same-sex spouses, it is important for employers to be proactive in deciding whether or not to offer same-sex spouse coverage and ensuring that plan documents are revised accordingly.

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July 1, 2014

“Partial Public Employees” Not Required to Pay Agency Fee to Union, Rules U.S. Supreme Court in Harris v. Quinn

Huntington_CBy R. Calder Huntington 

Yesterday the U.S. Supreme Court ruled that the First Amendment prohibits the mandatory collection of a union’s agency fee from certain in-home care providers who are paid by the government but who are employed by the individuals for whom they provide care, in a hotly contested 5-4 decision.  Harris v. Quinn, 573 U.S. ___ (2014).  While not overruling earlier precedent that upheld mandatory agency fees for public employees, Abood v. Detroit Board of Education, 431 U.S. 209 (1977), the Court refused to extend that ruling to this group of what the majority called “partial public employees.”  Because today’s ruling was limited to this uniquely-situated group, organized labor dodged a bullet as a broader application of First Amendment rights to public employee agency fees could have turned virtually all public sector jobs into “right to work” positions. 

Personal In-home Care Assistants Objected to Union Agency Fees 

At issue in the Harris case was an Illinois labor law that authorizes state employees to join labor unions and requires members of a bargaining unit who do not want to join the union to pay an “agency fee” to the union.  Deducted by the employer from the worker’s pay, the agency fee is intended to pay that worker’s “fair share” toward the collective-bargaining process and contract administration since the union must represent all individuals in the bargaining unit whether they choose to join the union and pay “dues” or not. 

The workers in this case are personal care providers (“personal assistants”) who provide in-home services to elderly family members or disabled individuals under the Illinois Rehabilitation Program.  Like similar programs in most states, Illinois’s program allows for participants to hire personal assistants to provide homecare services and the State, subsidized by the federal Medicaid program, pays the personal assistants’ wages.  Other than providing compensation, the State does not otherwise control the employer-employee relationship as the participant is free to hire, train, direct, evaluate, supervise, and discharge their personal assistants. 

In 2003, Illinois amended its Public Labor Relations Act to declare that personal assistants were public employees for labor relations and collective bargaining purposes, but for no other purpose. Personal assistants were not state employees for any other purposes and were not eligible for state employee benefits.  Shortly thereafter, the SEIU was voted in as the exclusive union for the personal assistants for purposes of collective bargaining.  The agreement reached between the SEIU and the State of Illinois contained an agency fee provision, requiring all personal assistants who were not members of the union to pay a “fair share” of the union dues.  A group of personal assistants filed a class action alleging that that the Illinois law authorizing mandatory agency fees violated the First Amendment as the fee provision requires them to pay a fee to a union that they do not want to support. 

Personal Assistants Are Not Full-Fledged Public Employees 

The Court determined that the personal assistants at issue are employed by the individuals for whom they performed in-home care services, not by the State.  They are not entitled to the rights and benefits afforded to other public employees and therefore, are only “partial” public employees.  Moreover, because Illinois law requires that all personal assistants receive the same rate of pay and the union has no authority over any disputes between a personal assistant and their individual employer (eliminating the benefits of union grievance procedures), the justification behind allowing required agency fees did not apply to these workers.  Accordingly, the Court ruled that the rationale behind the mandatory collection of agency fees from public employees did not overcome the personal assistants’ First Amendment objections to supporting a union.  Therefore, the Court held that the First Amendment prohibits the mandatory imposition of agency fees on personal assistants who did not want to join or support the union. 

Past Precedent in Abood case Questioned but Not Overruled 

In defending its law, the State of Illinois argued that the Supreme Court’s 1977 decision in Abood applied to the personal assistants in this case.  Abood  held that a government entity may, consistently with the First Amendment, require public employees to pay a fair share of the union’s cost in negotiating on their behalf for better terms of employment.  Justice Kagan’s dissent states that the Abood case offers the definitive answer in this case, meaning that the agency fee requirement for the personal assistants should be upheld.  The majority, however, disagreed, stating that the analysis in Abood was questionable as it was based on precedent that was “thin” on First Amendment analysis and was not decided on constitutional grounds.  Despite the “questionable foundations” of Abood, however, the majority refrained from overruling Abood as the current case was distinguishable due to the unique “partial public employee” status of the workers. 

First Amendment Trumps Objectives of Agency Fee Provision 

After refusing to extend Abood in this case, the Court then evaluated whether the agency fee provision serves a compelling state interest that cannot be achieved through means that are less restrictive on the personal assistants’ First Amendment rights.  The majority concluded that the interests of “labor peace” and funding the union’s promotion of the personal assistants’ welfare were insufficient to overcome the restriction on the associational freedoms guaranteed under the First Amendment.  Therefore, the Court struck down the Illinois law requiring that personal assistants under the state’s Rehabilitation Program who do not wish to join the union pay an agency fee. 

Justice Alito wrote the majority opinion, joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas.  Justice Kagan filed a dissent which was joined by Justices Ginsburg, Breyer, and Sotomayor.

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